You Think You Have Problems? Try Retention in the Missile Technology Industry...

Short post today, but a timely one given what's going on in the world.

You have retention problems. You've got pay issues, leadership issues and Sally said something nasty to Jeff.  It's a hard-knock life.

Then, there's the missile technology industry.  

As luck would have it, I found myself on the phone on Friday with a HR manager type embedded in a division of a government contractor that produces missile technology.

Her biggest issue? Trying to convince young talent that it's OK (forget cool) to develop missile technology that is bleeding edge - and ultimately used to kill people on a weekly (if not daily) basis across the world.

As it turns out, we can all rattle the battle shields to our heart's content - this post isn't about politics. But at the end of the day, someone still has to produce the technology and innovation that keeps us a step ahead in the modern world of warfare.

According to my HR manager friend on the front lines of the missile technology industry, it's getting harder to find young technical talent that wants to work on missile technology.  Once they're in the door, it's even harder to keep them. Seems as if the drone strikes have a draining effect on this section of the talent industry, as their innovation and work contributes to a lot of death.

I'm more of a hawk than a pacifist, but in listening to her talk, it's pretty jarring to remember that there are thousands of people inside that industry that have to live with the fact that their work contributes to a lot of pain around the world. It's one thing to arm a soldier with the tools they need - you can spin that defensively as well as offensively, right?

It's a whole other thing to work on technology that's delivered in a pretty automated way and may cause civilian casualties on a routine basis based on the way targets use civilian populations as shields.

What would you tell this HR Manager?  I told her the only idea I had is to look at the recruits with low sensitivity as the best cases for retention.  Low sensitivity means low empathy, with is probably a requirement if you're going to be in the missile technology industry given everything that's going on in the world these days.

So the next time you feel grumpy about retention, just remember your peers in the missile technology industry.  


HBR Research on Complexity of Promoting High-Performers to Management Roles...

The best widget-maker becomes the widget-maker manager.  Which means we promote the people who are best in the functional area role, right?

And sometimes it's an absolute disaster.  We've all been there.  We promoted someone because they were strong as an individual contributor, then they became a manager and it turned into an absolute dumpster fire.  That's when we pledge to look at manager competencies differently.  Then we get busy and forget about it.

It's widely accepted that we promote strong individual performers into manager roles.  But there's little data to actual prove it - but HBR recently took a look and the results are interesting.

More data on the Peter Principle from the Harvard Business Review:

While the Peter Principle may sound intuitively plausible, it has never been empirically tested using data from many firms. To test whether firms really are passing over the 220px-Horrible_Bossesbest potential managers by promoting the top performers in their old roles, we examined data on the performance of salespeople and their managers at 214 firms. Sales is an ideal setting to test for the Peter Principle because, unlike other professional settings, it’s easy to identify high performing salespeople and managers—for salespeople, we know their sales records, and for the sales managers, we can measure their managerial ability as the extent to which they help improve the performance of their subordinates. The data, which come from a company that administers sales performance management software over the cloud, allow us to track the sales performance of a large number of salespeople and managers in a large number of firms. Armed with these data, we asked: Do organizations really pass over the best potential managers by promoting the best individual contributors? And if so, how do organizations manage around the Peter Principle?

First, we found that sales performance is highly correlated with promotion to management. For salespeople, each higher sales rank corresponds to about a 15% higher probability of being promoted to sales management.

Second, sales performance is actually negatively correlated with performance as a sales manager: when a salesperson is promoted, each higher sales rank is correlated with a 7.5% decline in the performance of each of the manager’s subordinates following the promotion. We found similar results regardless of whether salespeople were promoted to their own team or to new teams. In other words, firms tend to promote top sales workers into management, even though they become the worst managers.

 Does that mean we are promoting the wrong people?  Maybe.  Or maybe the performance of the team comes up as a new manager gains experience and understands what's required in the role.  

In our data, among people who were actually promoted, better salespeople ended up being worse managers. But if we could observe the managerial potential of all salespeople, and not just those who were promoted, would we still find a negative correlation between sales performance and managerial performance?

Answering this question is difficult because the promoted managers we observed in the data weren’t promoted at random. For example, if firms promoted by flipping a coin, then poor salespeople could get promoted because they were lucky, rather than being promoted because their employer observed qualities that overcame their deficiencies as salespeople. Although people aren’t getting promoted by coin flips, they are more likely to be promoted if they happen to be in the right place at the right time: using variation in the promotion rates across industry over time to act as our coin flips, we still find that better salespeople tend to be worse managers.

We also found that firms underweight other indicators that a salesperson would be a good manager. In particular, we found that salespeople whose sales credits were shared among a large number of collaborators become very effective managers. Credit sharing for enterprise sales is typically a mark that the salesperson was involved in large, complex deals requiring collaboration. This type of collaboration experience positively predicts managerial quality.

What do you do with all that?  I think the choices are pretty simple.  You can:

1--Do a better job assessing who in your company has the DNA of a manager.  There's a set of skills - much like the collaboration element cited above - that can tell you who is naturally inclined to the do the job.  Find a great provider like Caliper to help you dive in.

2--You can actual train your managers of people to get better in the most important conversations that drive business results.  If you're looking for that type of training series, don't forget about the BOSS Leadership Series I've put together at Kinetix.

3--You can keep doing what you're doing.  Godspeed.

Hit me in the comments with what you think about the research from HBR.

 


Miss Robin - A Story on the Value of Employee Retention...

Take a look at this Instagram post below (email subscribers, click through if you can't see it) and I'll tell you more after the jump:

So here's your backstory on this-- I spoke Monday in Atlanta in front of a large group of franchise owners at Primrose Learning Centers.  The Dunn's are former Primrose parents, and
IMG_3669happy ones at that.  So I was excited when Primrose choose my company (Kinetix) to provide Recruiting and HR services for the parent company, which is headquartered in Atlanta.

That would have been enough.  But when pulling together my presentation, I got to tell a great story.  Drew Dunn, my oldest, was a Primrose student for 5+ years before he entered Kindergarten.  He was at Primrose from 2000-2005.  

Flash forward to 2017.  Mrs. Dunn and I are headed somewhere with Drew and he wants to pull into a Taco Bell (that's his hangout, don't judge) to get a drink.  So we pull in there and notice that it's taking a long time for him to get that Mt. Dew.  We look in and see him talking to an adult.  Another couple of minutes pass and he walks out with someone we immediately recognize as a former Primrose teacher - Miss Robin!

Miss Robin (pictured above ) recognized Drew- 13 years after she was his teacher at a Primrose school - and picked him out of a crowd! She’s still at Primrose. How many referrals do you think they will get from us based on the power of that?

Who needs facial recognition from a computer when you have Miss Robin?

That's the most powerful lead I could have for my presentation - The power of committed employees is remarkable, which makes hiring AND retention key.

Looking forward to helping Primrose find better ways to locate talent that makes a difference in our world.  The more people like Miss Robin they can find, the stronger they will be!


Are People Who Have 8-10 Years at Their Current Company Dinosaurs?

I think an interesting thing has happened when it comes to careers, and it's probably not a good thing.  People have historically judged you by switching jobs too often.  That's why I always counsel people to stick it out a year (preferably two) before jumping out of a less that perfect situation.

But in today's high change environment, there's another way candidates are getting judged:

Candidates who are approaching the decade mark (10 years) with the same company are increasingly being viewed as Get off my lawn being low-change, less-than-nimble dinosaurs.

Too harsh?  Well, I'm working on my 8th year at Kinetix, which far outlasts any other stop I've made in my career (previous record - 5.5 years.  I don't feel less nimble, but I can understand how the marketplace might think I'm "settled in."

"Settled in" is code for:

--set in my ways

--telling young kids to "get off my lawn" at work

--digging the long lunch

--not stirring up necessary change

--understanding it's "beer-thirty" somewhere.

OK, I'm an owner/investor at Kinetix, so maybe my situation is a bit different.  Like the Eagles once said, I can check out, but I can never leave - but I don't feel like I've checked out.

Unfortunately for those of my ilk (minus the ownership part) that would like to make a move - The 8-10 year professional grade worker who has risen to Director level, etc - the market might view them as settled in/tired.   For some, that's absolutely an accurate description.  For others, it's unfair.

If you're part of the latter group - open to a change but wearing the scarlet letter of too much time at your current company - there are things you can do to signal to the world that you don't sleep at work and could actually #### some #### up if they take a chance and hire you.  Things like:

1--update your LinkedIn profile (turn off notifications if you don't want your company to be notified)

2--write something that shows your passion for what you do

3--if you're cranking out killer work product that's non-proprietary, share the slides/excel/word docs publicly

4--participate in professional groups/events outside of work

What am I missing 1-company people?  What else can people who have been at the same place 8-10 years do to show they are open to new opportunities?  

It's hard being a middle-aged professional and straddling the line between being content and being eligible for the external game.

If you want to be in the external game, you've got to act accordingly.

Now get the #### off my lawn.


This Year's Final Four Proves The Value of "Well Placed" over "Top" Talent...

If you're watching/following the NCAA Men's Basketball Tourney this year, your bracket is shot, your team is likely gone and there's only one thing left to do. 

What's that thing you ask?  

Look at the rosters of the teams that made the Final Four and make a Talent observation. Gonzaga  Naturally. 

This year, that observation is pretty simple.  If it's long term performance you're looking for, you're likely better off not chasing the top 1% of available talent, you're better off in the 75th to 95th percentile due to performance and retention considerations.  More for the setup from the Newton Daily News:

If you take a peak at nbadraft.net to see who the top prospects for the upcoming NBA draft are, you’ll find a bunch of freshmen.  We live in a one-and-done world of college basketball. The rules force future NBA players to spend at least one season playing college basketball.

In the day of the one-and-dones, the four teams left in the NCAA Tournament are doing it with grown men.

Oregon has three freshmen on its entire roster, which is probably normal considering coaches bring in players every year to balance out rosters. Five Ducks are averaging in double-figures and four of them are juniors or seniors.

Gonzaga is probably one of the more successful programs in the country that does it with older players every year. The Bulldogs have freshman Zach Collins, who is projected to be a lottery pick. But he isn’t even one of the four Gonzaga players averaging in double figures.

North Carolina is a program one would think would be able to roll with the one-and-done model, but head coach Roy Williams has built this current roster differently. The Tar Heels lost in the championship game last year and are back in the Final Four with a team full of juniors and seniors.

South Carolina has the youngest team of any Final Four teams. The Gamecocks have freshman standout Rakym Felder and sophomores PJ Dozier and Chris Silva. But two of their top three scorers are senior guards who weigh an average of 218 pounds. Grown men.

The lesson for most of us is pretty simple.  Even if you can afford to chase top talent, it's probably not in your best interest.  Extrapolate the NCCA Final Four to your business, and the parallels are there.  You can chase top/top talent, but you'll likely pay more and have almost immediate retention concerns.  But lurking just underneath that talent pool is a group of candidates for any position that can deliver 80% of the performance for 60% of the cost/risk.  In addition, since the retention issues are diminished in this group, They'll deliver increasing performance over time because they'll stick around.

It's sexy to chase the rock star.  The Final Four is reminding us that the 85th percentile of available candidates is a place with pretty good ROI.

I'd rather my company be Gonzaga than Kentucky from a talent perspective.


The Heisenberg Rules: What HR Can Learn from Breaking Bad (#2 - Affiliation Matters)

Capitalist Note - I finally got around to binge-watching the former AMC hit Breaking Bad on Netflix, which follows high school chemistry teacher Walter White's journey through a lung cancer diagnosis and his subsequent turn to becoming a world-class meth producer.  This series (The Heisenberg Rules) represents what I was reminded of as a HR leader by Breaking Bad.  If you haven't seen the series, you can view a synopsis by clicking here. Spoilers abound in this series.

Rule #2 in the Heisenberg Rules is AFFILIATION MATTERS:

One of the best things about Breaking Bad is the time it takes to develop the primary characters Pinkman in the series.  In my last post in this series, we talked about the emasculation of Walter White. Would he have turned into the monster he became if those around him could/would have acknowledged his high performance?  We'll never know.

Today we move away from Walter White and take a look at my favorite character in the series - Jessie Pinkman.  Here's a description of Jessie: 

Jesse Bruce Pinkman is the deuteragonist of Breaking Bad. He is the former partner of Walter White in the methamphetamine drug trade. Jesse was a small-time methamphetamine user, manufacturer, and dealer. He was also an inattentive student in Walter White's chemistry class, leading to his dropping out. In his mid-20s, Jesse became Walt's business partner in the meth trade. Before his partnership with Walt, he, operating under the pseudonym "Cap'n Cook", added a little Chili Powder to make his methamphetamine stand out in the market.

Walt insisted on making a pure product, however, and thus eschewed the chili powder altogether, patronizingly teaching Jesse how to make "proper" meth. Walt often treated Jesse like a foolish son in constant need of stern correction. Jesse's own family kicked him out because of his drug use. Despite the friction between them, he and Walt have a deep bond of loyalty. Like Walt, Jesse is horrified by the brutality at the higher levels of the drug trade, but does what he thinks is necessary. He wrestles with feelings of guilt about the deaths, all drug-related, of people he's been associated with, especially his girlfriend Jane Margolis. He often attended Narcotics Anonymous meetings to help deal with these feelings.

Jessie's my favorite character because he actually struggles to cope with all the things he sees in the drug trade.  Still, he's a simple kid making a load of cash with few other options available to him professionally.  

Walter White and Jessie are "partners" only in finance.  As the subject-matter expert, Walter has all the power in the relationship.  The green shading above accurately outlines how Walter patronizes Jessie throughout the series, only appealing to him as an equal when there's a murder to be completed to ensure their safety. 

As a result of that treatment, Jessie is what I call, "gettable" for anyone who wants to take the time to drive a wedge between him and Walter.  

Jessie knows that Walter doesn't consider him a true partner.  That means people willing to treat him better than Walter have a chance to turn him to their side. That ultimately happens when Gus, a drug load who Jessie and Walter work for, instructs his henchmen to take Jessie out of the meth lab to run various organized crime errands with them. They even go to the trouble of setting up a fake robbery that Jessie can save others from, which results in praise, deeper connection and - you guessed it - Walter going crazy that their bosses have Jessie doing work other than being his patronized assistant.

When Walter displays his paranoia to Jessie about the new relationship he can't control, it pushes Jessie to trust his new friends more, not less.

Of course, they're all criminals, so what's the point?

The point is that in any organization, AFFILIATION MATTERS. 

Walter's the best at what he does, but Jessie is treated as manual labor, not a partner.  When the drug lords involved need to make Walter feel unstable and at-risk, all they have to do is show Jessie Pinkman the love he doesn't get from Walter:

--come work with us.

--come hang with us.

--seems like you're doing well - nice work!

It's the same blueprint whether you're developing software, running a restaurant, or yes - cooking Crystal Meth.

If you're treating someone valuable on your team like a commodity, just know this - if there's a market for their skills, all it takes is for someone who needs them (or needs to hurt you) to show them love, affiliation and respect.

Once that happens, they're probably gone.  Or as Jessie Pinkman would say, "YO, MANAGING PEOPLE 101, B***H".


ABOUT KEVIN LOVE: When You Recruit A Star, It Makes Sense to Maximize Their Chances For Success...

Let's face it, HR leaders, it's happened to you and your organization. You had a key role available. You helped your organization go out and do what was necessary to get the best talent available.  

Then a funny thing happened - The talent showed up, the scene they walked into at your company was kind of messed up, and the key hire left after two years.

In short, you did a great job on the recruiting front, but your organization and hiring executive failed to think about what changes were necessary to maximize the performance of the key new hire.

As a result, the new hire quickly got out of the honeymoon period and viewed your organization as a dysfunctional circus. You should have planned better.  You're not alone - the Cleveland Cavaliers should have planned better as well. Love meme
Consider these brief notes from Fansided on the on-boarding of Kevin Love, an all-star in professional basketball and recent underperforming, high-paid member of that NBA Franchise:

"In Love’s final season with the Minnesota Timberwolves, he posted an incredible 26.1 points and 12.5 rebounds per game. He was one of the best rebounding big men in the NBA at the time, however, now he is nothing more than LeBron’s sidekick who makes a lot of mistakes.

(Capitalist Note - The Cavaliers traded for Love two years ago, seeking to put a third all star with existing team members Lebron James and Kyrie Irving.  The trade was universally greeted with applause, but Love's performance has been lacking in extreme ways..)

It seems like a perceived notion that the Cavaliers will shop Kevin Love this off-season, especially if they fall short in Game 7. The power forward hasn’t been the same player since being traded to Cleveland, however, that didn’t stop him from signing a $5 year, $113 million deal last summer. Love is set to receive $21.5M, $22.5M, $24M, and $25.5M over the next four seasons, and Cleveland would love to get that off their books.

The Cavaliers would much rather use that money somewhere else and also try to land a more valuable pick in the upcoming draft, even if it’s not a top-five selection.

Cleveland tried to turn Love into what Miami turned Chris Bosh into when LeBron spent four seasons with the Heat. They have him hang on the perimeter where most of his shots come from behind the arc now – 44.9 percent of shots. It has led to a significant decrease in his scoring and rebounding production as a result.

Part of the reason is that’s how big men have to play nowadays, however, the Cavaliers have banished his role in the paint. You rarely see Love post-up down low anymore, he’s used as a kick-out option for a driving teammate. Not only does it not fit his offensive game but it also cuts into his rebounding – the strongest part of his game."

The point to this - and there is one - is that the Cavs were just like your company at its dysfunctional best.  They looked for the best talent available and got the deal done.  Then the high-priced talent showed up, and no one asked the question of what was necessary to get the new hire performing at a high level.  You just gave them an office and expected him or her to figure shit out.

Of course, it's never that easy.  The Cavs opted to give Love a bunch of money.  But Love has a history of playing a certain way, and the Cavs didn't attempt to figure that out at all.  As a result, Love's putting up numbers that the market suggests are worthy of a third of what he's being paid.

The reality is that when you bring a high performer into your organization, you have to ask what you're doing to make sure the company gets the return on that investment.

The Cavs never asked that.  Your company doesn't either.  You just ask the new hire whether they want a Mac or a PC (after all, they're top talent! They deserve that choice!) and leave the rest to them. 

Love touched the ball in Cleveland 25% as much as he touched it in Minnesota.  Are you doing the same thing with a key hire at your company and still expecting them to perform at a star level?

Probably.


"Organ Donors for The Rich" - Money Quote of the Day On Organizational Turnover...

You just lost another one.  People are looking to you, because... well, you're the HR leader and you're responsible for turnover, right?

Of course, you know that there are a lot of reasons that people leave.  But you also know that your calls for a more competitive compensation structure has fallen on deaf ears.

That's OK.  It actually gives you an opportunity to break out the following go-to line sure to be repeated away from HR:

--"We're organ donors for the rich" 

You need a go-to line to underscore your lack of competitiveness when it comes to total comp.  Would you rather go with "We're organ donors for the rich", or "we really need to look at the competitiveness of our comp plan next budget season"?

Words matter.  Use talking tracks that get repeated when you're not around.  It's part of your HR Brand.


Non-Competes and Non-Solicitation Agreements: You're a Sucker If You Don't Think They Apply To HR

So you locked down your sales team and the techies who drive the value of your intellectual property (IP) with a solid, enforcable non-compete and non-solicitation executed at the time of hire.  Sure they balk and complain, but you get most of those signed.  Congrads, smart move.

What's that?  You're glad you don't have to do the same with your HR team?  Really?  You don't have your HR Managers, Director and VPs and all your recruiters locked in to anon-compete and non-solicitation? Trust-but-verify

You're either a sucker or rationalizing to avoid the conflict.  Of course, your top HR talent and anyone who recruits should have to sign a fair non-compete.

Think about it - we're talking a narrowly drawn non-compete and non-solicitation.  Your top HR team members (I say manager and up) and anyone who recruits should have to sign one.  We're not preventing them from working by signing the non-complete, we're simply agreeing that they won't take all the training, contacts, employees and candidates that they've cultivated during their time with you to your most direct competitors.

A narrowly drawn non-compete and non-solicitation doesn't mean HR pros can't find work.  If fact, the HR game is one of the best in terms of its talent being able to cross industries and work.  That "career portability" means your HR team can sign a non-complete that's properly drawn (example - we're a software company and you can't go to work for another software company in our city/industry or that recruits developers proficent in the same programming language as our company) and find work pretty easily if they're talented in the HR game.

Why wouldn't you ask them to sign a fair non-compete and non-solicitation?  Because you either don't think they're talented enough to get the same job with your top industry competitor, or you don't want the drama of walking them through it and requiring it.

Either scenario sounds dicey to me.  

Draft the non-compete and non-solicitation and put it in front of them.  Explain the narrow parameters and require them to sign it.  You'll be happy you did somewhere down the line.


Should You Let Your Employees Vote About Where To Move Your Offices To? Probably.

I'm p*ssed off but I'm too polite
When people break in the McDonald's line
Mom and Dad you made me so uptight
I'm gonna cuss on the mic tonight

I'm rockin' the suburbs
Just like Michael Jackson did
I'm rockin' the suburbs
Except that he was talented
I'm rockin' the suburbs
I take the cheques and face the facts
That some producer with computers fixes all my sh*tty tracks

--Rockin' The Suburbs, Ben Folds

It's a classic example of "don't ask the question unless you're going to honor the answer."

Let's say you've decided that you're going to move your offices to another location - due to space needs, effective rent issues or other reasons.  You're in the market, looking at 5-6 different locations and you've cut it to two,both with a fairly even number of pros/cons.  

Do you let your employees vote on which location they'd rather be at?  HealthSouth, headquartered in Birmingham, recently did just that. More from AL.com:

"HealthSouth CEO Jay Grinney surveyed all of his corporate employees while looking at potential sites for the new headquarters: Would you rather work in Liberty Park or in downtown Birmingham?

The company had narrowed down the move to spots in Liberty Park or in an area near Regions Field downtown. But the answer from the 500 employees who work in the corporate headquarters was resounding.

"Something like 70 percent of our employees preferred the [Liberty Park] site over downtown," Grinney said. "A lot of people and other leaders in the community were really urging us to go into the midtown location. I, personally, did not want to make a move where 70 percent of the corporate employees would not be happy."

How do you view that information?  55/45 probably doesn't tell you to go to one location or another.  60/40 might, but 70/30 closes the deal.  I think it's a good idea to ask people how they feel, but only if you're OK with giving that opinion weight in the final decision should the majority be clear and you're willing to report back.  Otherwise, don't ask.  

Grinney went on to take a shot at regional planning in the Birmingham metropolitan area:

"About a decade ago, officials suggested building an elevated toll road over U.S. 280, igniting a years-long controversy over the project. Communities including Homewood, Mountain Brook and Vestavia Hills protested the highway. Years later, the project lost momentum. 

"It's sort of ironic," Grinney said. "If we, as a community, had chosen to proceed with the elevated toll road that was being contemplated several years ago, that toll road probably would have been completed by 2018. Had that been the case, we probably would be going downtown, because traffic congestion would be a moot point." 

It's a good lesson that a lack of regional government will effectively slowly choke out the urban core of any city (in the case of Birmingham, affluent suburbs the toll road was going to have to be built through effectively killed the project).

As a result, HealthSouth will be rocking the suburbs - like Ben Folds.